COVID-19 curbs bite at Chinese ports, threatening global supply chains - CNA

SINGAPORE: The queues of container ships outside major Chinese ports are lengthening by the day as COVID-19 outbreaks in manufacturing export hubs threaten to unleash a fresh wave of global supply chain shocks, ship owners, logistics firms and analysts say.

China is experiencing its biggest spike in COVID-19 infections since an initial outbreak in the central city of Wuhan was contained in early 2020.

The spread of the highly-infectious Omicron variant this month has led to movement controls across China, including in key manufacturing hubs of Shenzhen and Dongguan, paralysing factories making goods from flash drives to car parts.

While China’s main ports remain open and vessels are continuing to dock, congestion is building up and some container ships are re-routing to avoid expected delays, according to ship owners, analysts and supply chain managers.

Charter rates are expected to ramp up, while delays to shipping freight grow longer, they said.

SUPPLY CHAIN CRISIS

Container loading is “decreasing massively” at Shenzhen's Yantian port, the world's fourth largest container terminal, as port workers, truckers and factory workers stayed at home, said Jasmine Wall, Asia-Pacific manager at SEKO Logistics.

“This implies that it will become difficult to get cargo to and from the ports and hence whether the terminals are open or not becomes a moot point,” said Lars Jensen, CEO at Vespucci Maritime, a container shipping adviser.

"It will have a disruptive impact on the supply chain - in turn prolonging the current supply chain crisis.”

Currently, there are 34 vessels off Shenzhen waiting to dock, compared to an average of seven a year ago, according to Refinitiv ship tracking data. At Qingdao, an eastern Chinese port city, there are around 30 vessels waiting to dock compared to an average of seven last year.

Charter rates per 40-foot container remain close to all-time highs across major global shipping routes, trading at around US$16,000 on the China-US West Coast route and nearly US$13,000 from China to Europe, according to Freightos shipping index.

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2022-03-16 07:41:26Z
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